Correlation Between Symtek Automation and Lien Chang

Can any of the company-specific risk be diversified away by investing in both Symtek Automation and Lien Chang at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Symtek Automation and Lien Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Symtek Automation Asia and Lien Chang Electronic, you can compare the effects of market volatilities on Symtek Automation and Lien Chang and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Symtek Automation with a short position of Lien Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symtek Automation and Lien Chang.

Diversification Opportunities for Symtek Automation and Lien Chang

0.33

Correlation Coefficient

Symtek Automation  Lien Chang

Weak diversification

The 3 months correlation between Symtek and Lien is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Lien Chang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lien Chang Electronic and Symtek Automation is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Symtek Automation Asia are associated (or correlated) with Lien Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lien Chang Electronic has no effect on the direction of Symtek Automation i.e., Symtek Automation and Lien Chang go up and down completely randomly.

Pair Corralation between Symtek Automation and Lien Chang

Assuming the 90 days trading horizon Symtek Automation Asia is expected to under-perform the Lien Chang. But the stock apears to be less risky and, when comparing its historical volatility, Symtek Automation Asia is 1.29 times less risky than Lien Chang. The stock trades about -0.03 of its potential returns per unit of risk. The Lien Chang Electronic is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,395  in Lien Chang Electronic on October 22, 2024 and sell it today you would earn a total of  30.00  from holding Lien Chang Electronic or generate 2.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Symtek Automation Asia  vs.  Lien Chang Electronic

Symtek Automation Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symtek Automation Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Symtek Automation is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Lien Chang Electronic

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lien Chang Electronic are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lien Chang may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Symtek Automation and Lien Chang

The main advantage of trading using opposite Symtek Automation and Lien Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symtek Automation position performs unexpectedly, Lien Chang can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lien Chang will offset losses from the drop in Lien Chang's long position.

The idea behind Symtek Automation Asia and Lien Chang Electronic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.